Completing Your Home Loan? Essential Tasks to Check Off

Completing Your Home Loan? Essential Tasks to Check Off

The experience of purchasing your own home brings about a sense of accomplishment, security, and happiness associated with owning a place that is truly yours. Homeownership is one of the top goals for many Indians, as evidenced by the 2023 edition of the annual survey ‘Aspiration Index,’ which interviewed over 1700 respondents aged between 22 and 45 years across India. Out of these, owning a house had the highest importance with 89.6 points, after mental health and children’s education.

The feeling of contentment that follows fully repaying your loan is incomparable. However, there’s more to do before you can rest easy. To attain full ownership of your home and save yourself from complications regarding the sale or transfer of your property in the future, there are certain documents you must obtain and tasks you must handle to cement your debt-free position. These tasks often have a direct bearing on your credit score and property records. Let’s take a look at the vital checklist of documents you must procure and the tasks you must handle to be truly debt-free.

The Vital Checklist

To ensure a smooth transition to being debt-free, there is a vital checklist of documents which you must obtain as a record of having paid your dues. Each document listed down below is crucial to safeguard your property ownership and must be obtained without fail.

All Original Property Documents

Once you have repaid your loan fully, retrieve all original documents you may have submitted as part of your loan application and registration. These may include the sale deed, title deed, possession paper, conveyance deed, transfer permission, power of attorney, builder-buyer agreements, and payment receipts, all of which should be returned to you upon loan closure. Typically, banks provide a List of Documents (LOD) during the loan application process to keep a record of the documents you have submitted. You can use this list or one you may have created yourself to verify the documents you receive post loan closure to ensure nothing is missing. Ensure that the documents returned to you are complete and in good condition, with no missing or torn pages.

No Objection Certificate (NOC):

After the loan has been fully repaid, the lender must issue a no Objection Certificate or NOC to the borrower. The NOC serves as a confirmation that there are no outstanding dues against your loan. Thus, securing an NOC from your lender is paramount for it formally declares the culmination of your financial commitment, giving you undisputed ownership. After obtaining the NOC, verify that essential details such as your name, closure date, property information, loan account number, etc., are accurately stated in the document. An NOC is crucial especially if you plan to sell your property in the future or face any issues related to the loan’s reporting to credit bureaus.

Removing The Lien From Your Property

In the case of an outstanding home loan, a legal claim known as a lien is placed on the property. This grants the lender certain rights in case the borrower defaults on their loan. Once you have settled your home loan, you must initiate the process to remove the lien from your property with the registrar which may require submission of the NOC. This will strengthen your claim and ensure a clean slate for future transactions.

Obtain and renew Encumbrance Certificate

If you have closed a loan on a property, make sure to obtain an Encumbrance Certificate (EC). This certificate ensures that your property is free from legal dues and encumbrances, giving you peace of mind. You can obtain this certificate from the registrar’s office which will serve as evidence that there are no outstanding financial claims on the property and all its dues have been completely settled. This certificate is especially useful if you intend to sell the property in the future.

Retrieve Security Cheques

Retrieve post-dated security cheques submitted during the loan tenure. This will help finally close the loan and prevent any inadvertent complications.

Ensure loan status is updated

Once the loan has been repaid, your lender is responsible for informing the credit bureaus about the updated status of your loan. So, review your credit report approximately a month after the closure of your loan, in which the loan status must indicate as “closed”. This will indicate that the dues have been completely repaid. So, it is crucial to ensure that your loan status reflects accurately. If discrepancies arise in your credit report, you must raise the issue with the lender, have it investigated and rectified.

While checking your credit score, assess the impact of the loan closure on your overall credit score. Although the long-term effect of closing a loan is generally positive, it’s not unusual for there to be a temporary negative impact due to the closure of a secured credit line.


Closing a home loan can be immensely liberating financially. However, pay attention to the details, such as the ones mentioned above. Completing these formalities and obtaining these documents will provide you true peace of mind of being debt free and help you move forward in your wealth-building journey.

Also Read

Unlocking Tax Benefits: A Guide to Claiming Home Loan Tax Advantages

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